Nitya Capital

I have heard they are artificially inflating their returns from a buddy of mine. I see their ads all the time.

Do they have institutional capital, or is it all syndication money? The founder seems to have a legit background in REPE. 

They seem to bid on every marketed multi deal in the southeast. They've become quite the punchline at my shop.

Was the settlement disclosed?

Have a buddy who worked there and got pumped work wise. Their reputation is that of a bucket shop and really are a laughing stock in houston. Everyone jokes about them blowing up but it will probably happen. I mean just take a look at their office and it should tell you all you need to know. I saw their commercial today and it was touting a 36% IRR and then there was some really special fine print down at the bottom. To be perfectly honest, knowing their reputation I don’t think I’d work there if they offered me double my salary. All things considered, I would avoid like the plague

Yep being from Houston and went to school in Texas - can confirm they are a total joke and everyone thinks they will blow up - that being said they haven’t failed yet and maybe they are overpaying for assets and cap rate compression is just bailing them out.

They are buying and trading in institutional quality assets tho so I would assume comp is pretty comparable to other smaller acquisitions firms in Houston.

To echo above, scam artist would be putting it in a positive light.

As someone above mentioned, they are claiming 36% IRR on past investments for multifamily. This could largely be a byproduct of timing as they bought earlier in the decade and realized significant gains due to cap rate compression. However, I can't think of a single MF sponsor that does acquisitions claiming that level of return in the last few years.

Someone should send the CEO this thread or post it on LinkedIn and tag him

I wonder how the supposed 75% of Indian-Americans that voted for Biden are feeling now? Perhaps Mr. Agarwal was very prescient.

No first hand info but frequently talked about as scam artists. 

Nitya Capital CEO: I'm so humble. Look at how humble I am. I am more humble than you for sure. My firm is not about me at all, but I like to talk about myself on video all the time because I am so humbling of being humble to others with my humbly personality.

P.S. - Know a guy who worked at Nitya, the CEO likes to always be the face and just talks about his upbringing and humbleness. He said he's not a bad guy, but is kind of a joke. Also funny note, the guy claims he hired a bunch of freelancers from India so his youtube video can hit 1M videos. Please check out the comments on his youtube video, self-explanatory.

These guys are a total scam.  They've over paid for everything.  The only reason they haven't gone belly up is the market has saved them.   I mean, if you overpay and buy a $10m building for $12m, but then the market goes on a huge run and now that $10m building is worth $14m, you've been saved. 

Everyone knows this guy is a joke.  But props (seriously) to him for being able to build the portfolio he has.

I will actually admit to having invested with them.  In the investment, they got me an IRR of about 15%.  Honestly, given the market, I was disappointed that they didn’t do better.  Their returns are not untrue, but are heavily skewed by two or three deals that were grand slams.  I think in one of them, they doubled their money in six months, which is an IRR of 200+%.  So you can see how that can easily see how that can skew an average.

this company is a scam. they did not pay me back any returns for the last 3 years, even though the market has performed very well.

Any updates on how we’ll they’re doing? Looks like they sold 19 MF properties in TX in 2022.

I have heard a lot about these guys. A contact of mine is one of their lenders, and found that their enacting of a simple renovation plan was incomprehensibly bad and nonsensical. We're talking utter incompetence...they did not apply a standard set of finishes to a set number of units, but instead, just threw random components haphazardly into different units (i.e., some got the cabinets, some got the flooring, some got the counters, and none of them actually got all components). There was essentially no premium collected. 

Would be interested to hear how these guys are doing given the current environment.

The Managing Principal comes across as such a wanker.

Their building stares me in the face every time I pick up my favorite Thai food in Houston. That is all 

New GreenStreet REA - "High Interest Rates Spur Nitya To Sell Assets"

Multifamily investor Nitya Capital is looking to sell nearly 40% of its properties and has suspended at least some of its cash distributions as it grapples with higher debt payments. In a February letter to investors, chief executive Swapnil Agarwal outlined steps the Houston-based firm is taking to “weather the storm” caused by rapidly rising interest rates. It’s a sobering case study of how the “buy, fix and flip” investor mentality so rampant in 2021 is starting to unravel at some properties. As capitalization rates have risen amid the market dislocation, a property that was purchased “for $100 a year ago is now worth $66.1, essentially wiping out the entire equity on the project,” he said in the letter. Nitya, which syndicates equity investments from individuals to purchase and upgrade value-added properties, is in talks with lenders to refinance some of its loans and/or negotiate better terms. The firm is actively shopping at of its 60 properties — or 38% of its portfolio — in Arizona, Florida, Nevada and Texas, according to the letter. Eight of those worth over $200 million are under contract “at a higher price than our purchase price,” Agarwal wrote. However, he acknowledged that some of the properties have been under contract before but failed to close because buyers could not secure acquisition debt. The firm also has suspended some cash distributions, opting to use available funds to make the higher mortgage payments. And it’s deferring property and asset management fees. All its properties are managed by affiliate KPM Multifamily, which Agarwal founded in 2020. “We continue to take multiple steps that will ultimately protect our capital and hopefully generate meaningful returns in the future,” he said. Nitya acquired most of its portfolio in 2021, when interest rates hovered close to zero and property valuations and rents were rising rapidly. Like a lot of multifamily investors, it financed many of its acquisitions with shorter-term, floatingrate debt. But the picture has changed dramatically since then. As inflation surged in early 2022, the Federal Reserve began aggressively raising interest rates to tamp it down. Last month, the Federal Open Market Committee boosted the Fed funds rate to a range of 4.5% to 4.75%. It had been expected to announce another increase next week, though the failure of three banks over the past week has created uncertainty about where rates will go this year. Higher rates have translated to higher monthly payments for those with floating-rate loans. Nitya has not missed any mortgage payments or defaulted on any of its loans, but with some $2 billion of senior debt on its 60 properties, it’s paying an additional $60 million annually versus what it was paying in 2021. Agarwal noted in the letter that most of Nitya’s loans have interest-rate caps — hedges that protect owners from having to make interest payments above certain thresholds. Consulting firm EisnerAmper said in a recent report that roughly a third of commercial mortgages have floating rates. “A lot of equity capital will be required if many of those refinancings need topping up to lower the loan-to-value ratio or better cover higher debt service,” the firm said, noting that the number of loan covenant breaches is rising. Multifamily mortgages typically include covenants that set minimum debt-service coverage ratios. A DSCR greater than 1 generally means the property generates enough income to make its payments, while anything lower means it does not. Several of Nitya’s properties have DSCRs below 1, according to servicing data compiled by Trepp. The 616-unit Shore House, at 401 Century 21 Drive in Jacksonville, had a DSCR of 0.53, based on net operating income of $3 million, as of October 2022. The adjacent 487-unit Boat House, at 400 Century Drive, had a DSCR of 0.42, based on net operating income of $2 million. Nitya bought the properties in September 2021. Loans on the properties are securitized in a CRE CLO issued by Arbor Realty Trust. The Shore House loan is scheduled to undergo its first performance test on June 20, which requires a DSCR of at least 1.1. In total, Nitya purchased seven apartment complexes totaling 2,204 units in Jacksonville in late 2021. Agarwal said that while average rent in the Jacksonville portfolio had increased 22%, to $998 from $818, under Nitya’s ownership, “cashflow is currently slightly negative, with the shortfall being funded by Nitya.” “Our strategy is to exit a few assets within the portfolio to create liquidity and cashflow,” he said. Agarwal also addressed a 1,663-unit portfolio in Orlando that it purchased in October 2021 for roughly $263 million, or $158,000/unit, according to Green Street’s Sales Comps Database. The firm’s loan on the three value-added properties does not have an interest-rate cap — meaning it’s exposed to interest-rate risk. The portfolio is “slightly cashflow negative.” Nitya is in discussions with Arbor to refinance the portfolio via a Fannie Mae fixed-interest-rate loan, “which will tremendously improve cashflow” and make the portfolio more attractive to buyers. Nitya in November began shopping the package, which comprises the 769-unit Caden at Lakeside, at 1989 Americana Boulevard; the 558-unit Palmetto at Lakeside, at 4444 South Rio Grande Avenue; and the 336-unit Beverly at Lakeside, at 1182 Redman Street. Agarwal said that in the last 10 years, the firm has not lost “a single dollar for any of our investors, lenders or any stakeholder in any capacity.” During that period, Nitya has generated a 27.8% net internal rate of return, according to the letter. He told investors he hoped to start making distributions on certain assets by the end of the second quarter and felt confident the firm would not “have to do any capital calls.” Still, he concluded by emphasizing that “these are very difficult and uncertain times. “Maybe the pain is not apparent for [everyone] to see yet, but it will get worse before it gets better,” he said. 

I try not to speak ill of anyone and never hope anyone suffers in their business, but the two people I have a hard time feeling bad for are this Nitya douche and Cardone. I know other syndicators but they genuinely seem like good people so I feel bad for them, but these two need to STFU.

Couldnt agree more with you guys. F Cardone and Nitya, saw both of them at NMHC in Vegas and they absolutely reek of arrogance. Beardsley is a douche too. Everyone's a genious when rates are 2%, let's see what happens when the tide comes in.